The Metropolitan Transportation Authority has undergone many changes over the last year. One of the biggest changes came in the form of a new leader in MTA Chairman/CEO Jay H. Walder. Although his tenure has been short in length, his efforts to implement change have not.

Earlier today, the Chairman/CEO released a report entitled “Making Every Dollar Count” which details his first 100 days on the job. He also provided a keynote address at the Hilton New York earlier this morning.

I found out about the speech yesterday courtesy of the MTA but could not make it. However earlier today, the MTA issued a press release which highlighted some details from the report:

Metropolitan Transportation Authority (MTA) Chairman and CEO Jay H. Walder today released “Making Every Dollar Count,” a report of his first 100 days on the job that includes an assessment of the MTA and plans for improvement. Walder began his tenure on October 5 and released the report at a breakfast forum hosted by the Association for a Better New York. The full report is available, along with a video, on the MTA’s new website at www.mta.info.

The report recognizes the enormous improvement in the MTA’s transportation network over the past 25 years, but acknowledges that in many areas the MTA has fallen behind comparable transit systems around the world. All of the report’s observations are set in the context of the ongoing economic crisis and its impact on the MTA.

“When I started in October, I expected this report to talk about plans for finally starting to catch up with the rest of the world, and it does,” said Walder. “But I barely had my feet on the ground when the state’s economic crisis hit the MTA hard. It’s clear that my first priority right now must be to attack the MTA’s cost structure and ensure we are using every dollar effectively. At the same time, we must find affordable ways to improve service for customers who have been waiting far too long.”

Accordingly, the report identifies two main goals:

• Overhaul the way the MTA does business to cut costs and ensure that every dollar is being used as effectively as possible.

• Find affordable ways to make progress on service improvements despite the economic situation.

Cutting costs to create a more efficient MTA

Overhaul how the MTA does business:

The MTA is the product of mergers between dozens of former transportation companies, but steps were never taken to eliminate redundancies and find savings. The report identifies several areas to target for streamlining and cost reduction:

• The MTA has 92 different phone numbers for customer information, and 5 separate call centers.

• Almost 20 percent of the MTA’s administrative workforce is devoted to information services/technology.

By operating the MTA as one company – instead of multiple silos – significant cost reduction can be achieved.

Reduce the cost of providing service

Nearly 90 percent of MTA employees are focused on service delivery, so this area must also be targeted for sufficient cost reduction. Some areas identified in the report include:

• Almost $500 million spent annually on overtime.

• Some work rules limit the MTA’s ability to utilize new technology or streamline processes.

• The MTA spends 15 cents of every fare dollar on collection and processing.

Savings can be found in each of these areas. For example, reducing the cost of collecting fares to 12 or 13 cents per dollar would save millions of dollars.

Moving forward for customers

The report targets five areas for fast, visible, affordable improvements:

Faster bus service:

In 2010, the MTA and the City of New York will test a program to keep bus lanes clear. The partnership will focus on six highly congested corridors in Manhattan, Brooklyn and Queens by improving bus lane markings and signage, using on-the-spot ticketing, and deploying cameras in key locations. By targeting these six corridors, service will be improved on 50 total bus routes.

Tell customers when to expect the next train or bus

• In 2010, Customer Information Signs will be activated in 75 subway stations. In 2011, this same information system will be operational at all of the stations on the 1-6 subway lines.

• By the end of 2010, we plan to test bus arrival information systems from several vendors, to enable rollout of a system beginning in mid-2011.

• By March 2010, next commuter train information will be available “online” – via smartphone and web – for service to and from all LIRR and mainline Metro-North stations.

Bring Toll Collection into the 21st Century:

We are moving forward with plans to test state-of-the-art technology that allows all motorists to pay tolls without stopping at the Henry Hudson Bridge.

Make new fare technology work for customers:

In 2010, the MTA, New Jersey Transit and the Port Authority of New York and New Jersey, in partnership with MasterCard, will pilot new technology that will eliminate the need to swipe a farecard, will cost less to operate and eventually will provide subway, bus and commuter rail customers with other benefits, including faster bus boarding, regional interconnectivity, and the ability to select among unlimited ride and pay-per-ride options via the web and telephone.

Improve subway stations and service change information:
• The MTA will implement a completely new strategy for station maintenance that will:

o Make station maintenance as high a priority as equipment maintenance, even in tough times.
o Fix station components when they break, even if they don’t cause an immediate safety concern or the station isn’t due for a full renovation.
o Use materials that can be affordably maintained.
o Reinstitute a periodic painting program.
o Overhaul routine cleaning programs to do more than pick up litter.

• By mid-2010 the MTA will begin posting redesigned service change posters based on customer input, using station areas that are dedicated to service change information.

“Making every dollar count – that’s the only way we can restore the MTA’s credibility and continue improving service in difficult times,” Walder said. “I grew up here and started my career at the MTA, so I know how fundamental the transit system is to our daily lives. Today we established high goals for the MTA in a difficult time, but we must succeed.”

I had a chance to view the report along with the transcript of his keynote address. If words & ideas could solve the MTA’s problems, the agency would be on the right track. I think it is clear that Mr. Walder gets it & seems sincere about the MTA making the changes it needs to become a more efficient agency. The report alone covers the basics of what is currently wrong within the agency & the changes that need to be made in terms of fixing things.

However I think what really provided some hope is the speech he gave in which he really gets to the meat & potatoes of the problems. While on the surface it might seem he is just providing the PR spin that anyone would, he truly is not & even said as much.

His background at other stops including his days at McKinsey clearly tell him that a complete overhaul of how the MTA operates is necessary. The agency needs to become an efficient agency on all levels. You do not need to even follow the agency on a regular basis to know that it lacks any sort of efficiency in terms of how it is run.

When I started my career at the MTA in 1983, our graffiti-scarred trains and buses were a national symbol of urban decay; today, millions of riders enjoy reliable, safe service on new or rebuilt equipment. And for the first time in a generation, the MTA is expanding the transit system with the construction of East Side Access, the Second Avenue Subway and the Number 7 Line extension.

Clearly we’ve come a long way. It is important to recognize this turnaround; I think we can all agree on that. But I’m not here to give you that MTA speech again. From my perspective, the time for the MTA to pat itself on the back has long passed. There’s no question we’ve improved, but in many ways the MTA has fallen behind the rest of the world. I’d like to give you a few examples.

Many cities now have a system to tell riders when the next train is coming. In London, for example, you’d walk down the stairs, look up at a digital sign and know that the train would arrive in 2 minutes, or 4 minutes or 8 minutes. You had a sense that someone was in control, that your commute was not in chaos.

Coming back to New York, I’m reminded of the special system we have here: we come down the stairs, we walk to the edge of the platform, and we lean over the edge in hopes of seeing a white light at the end of the tunnel. You see it every day; people walk to the edge, step back for a few seconds, then go to the edge and look over again. What comes across is a sense of angst and anxiety.

While there’s a common nameplate on the doors, the MTA is really a collection of two dozen formerly independent operations that were merged over the past 40 years. You all know that in your business, when companies merge, theystreamline operations and reduce redundancies. You take the best from each company and use the merger to cut costs and operate more efficiently. In my
days at McKinsey, we would call this post-merger management. Well, the MTA has gone through plenty of mergers, but its never done the management part. It shouldn’t be a surprise then that the organization is not nearly as efficient as it needs to be.

Let’s say you want to call the MTA to ask a question about transit service or report a problem. You’re in luck! We have a choice of 92 different numbers for you to call, and we operate 5 separate call centers. This is one of the reasons we still have over 5,000 people doing administrative tasks.

We also need to take a hard look at the service we provide. Most of it is essential – which is why the service cuts we’ve been forced to make are so painful. But there are other services that no longer make sense. I just learned that we run an express bus from Grand Central to Wall Street. A grand total of 20 people take this bus each day, and it costs the MTA $80 per person to run this service. I can
assure you that we won’t be running the X25 much longer.

I could go on and on, but that is exactly the point: this cannot continue to go on and on. The current economic climate demands that we take this once in a generation opportunity to transform the way the MTA operates. And I intend to take it.

We will attack the MTA’s cost structure, looking at every aspect of our operation to find better and less expensive ways of providing critical service. We will look at the MTA as it should be – as one entity – and not as the separate fiefdoms that have evolved. I know it will be painful. We will be forced to find new ways of thinking and there will be layoffs, but we have no choice.

We will take the same approach with our capital program. We must ensure that every capital investment will reduce our operating costs or improve customer service or safety. We need to be focused on achieving these results.

Clearly we have a lot of work to do to make the MTA a more efficient organization. But the end game is always to improve the service we provide. That’s why we’re here. When I go around the region, people have been asking me if it’s also possible or even smart to try to improve service now. Can we really do both things? The answer I give is simple: we must! Our customers have waited too long for basic service improvements; we can’t let the current economic downturn be an excuse for standing still.

As I said, I feel Mr. Walder gets it & if he comes anywhere close to following through with his initiatives, we as riders will be extremely better off. I must say I find it interesting that he took a direct approach with unions & how it is vital that they cooperate for the good of everyone involved. I wonder how the unions will take that considering the tension between the parties is arguably as tense as it ever has been.

When push comes to shove though, the success or failure of the Jay H. Walder reign will be judged by a riding public who has little faith in his agency. However the truth of the matter is, he & the entire MTA workforce can not do it alone. This needs to be a combined effort from the entire workforce, the riding public, & most importantly our elected officials. Money makes the world go round & that is no different when talking about the MTA.

In the end, the success or failure of his reign will be determined by the government. Will they let him & more importantly all of us down? For the sake of millions, I sincerely hope not as we can’t afford for that to happen.

Comments

The x-25 is a route that runs in Manhattan but comes out of a Brooklyn depot (Ulmer Park). We run three other express runs to Manhattan and instead of us just running back empty they created the x-25. For example you do a x-37 trip to 59th and Madison and instead of heading back to Brooklyn you go to Grand Central and do a x-25 trip to the battery and then head back to Brooklyn.